jpmorgan european investment trust plc · 2019-12-02 · contents contents half year performance...

JPMorgan European Investment Trust plc Half Year Report & Financial Statements for the six months ended 30th September 2019

K E Y F E A T U R E S

Your CompanyThe Company has two share classes ‘Growth and Income’, each with distinct investment policies, objectives and underlying asset pools.Shareholders in either of the Company’s two share classes are able to convert some or all of their shares into shares of the other classwithout such conversion being treated, under current law, as a disposal for UK capital gains tax purposes. See page 38 for furtherdetails of the Company’s capital structure and annual conversion on 15th March between share classes.

Objectives Growth Portfolio

The investment objective of the Growth portfolio is to provide capital growth and a rising share price over the longer term fromContinental European investments by taking carefully controlled risks through an investment method that is clearly communicated toshareholders.

Income Portfolio

The investment objective of the Income portfolio is to provide a growing income together with the potential for long term capitalgrowth by investing in a portfolio of investments that is diversified amongst countries, sectors and market capitalisations within theuniverse of Continental European companies.

Investment Policies • To invest in a diversified portfolio of investments in the stockmarkets of Continental Europe.• To manage liquidity and borrowings to increase returns to shareholders.

Growth Portfolio

• To emphasise capital growth rather than income, with the likely result that the level of dividends will fluctuate.

Income Portfolio

• To provide a growing income together with the potential for long-term capital growth.

Benchmarks Growth and Income

The MSCI Europe ex UK Index (total return) in sterling terms.

Capital Structure At 30th September 2019, the Company’s share capital comprised 69,941,803 Growth shares and 100,575,498 Income shares.A share voting number is attributed to each of the Growth and Income shares so that the votes available to each of the two classes ofshares equates to the proportion of the net asset value of the Company that the Growth and Income pools represent.In addition to the votes available as referred to above, the Growth and Income shares also have rights in respect of dividends andreturn of assets as detailed in the Company’s Articles of Association.

Management CompanyThe Company employs JPMorgan Funds Limited (‘JPMF’) as its Alternative Investment Fund Manager. JPMF delegates the managementof the Company’s portfolio to JPMorgan Asset Management (UK) Limited (‘JPMAM’).

Financial Conduct Authority (‘FCA’) regulation of ‘non-mainstream pooled investments and MiFID II‘complex instruments’The Company currently conducts its affairs so that the shares issued by JPMorgan European Investment Trust plc can be recommendedby Independent Financial Advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstreaminvestment products and intends to continue to do so for the foreseeable future.The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in aninvestment trust. The Company’s ordinary share are not considered to be ‘complex instruments’ under the FCAs revised appropriatenew criteria adopted in the implementation of MiFID II.

Association of Investment Companies (‘AIC’)The Company is a member of the AIC.

WebsiteThe Company’s website, which can be found at www.jpmeuropean.co.uk, includes useful information on the Company, such as dailyprices, factsheets and current and historic half year and annual reports and investment methodology.

J P M O R G A N E U R O P E A N I N V E S T M E N T T R U S T P L C . H A L F Y E A R R E P O R T & F I N A N C I A L S TA T E M E N T S 2 0 1 9

C O N T E N T S

C O N T E N T S

Half Year Performance

Growth Shares 3 Total Returns – Growth Portfolio

Income Shares 5 Total Returns – Income Portfolio

Chairman’s Statement 8 Chairman’s Statement

Investment Review 12 Investment Managers’ Report

Growth Shares 13 List of Investments 15 Portfolio Information 17 Statement of Comprehensive Income 18 Statement of Financial Position

Income Shares 19 List of Investments 22 Portfolio Information 23 Statement of Comprehensive Income 24 Statement of Financial Position

Financial Statements 26 Statement of Comprehensive Income 27 Statement of Changes in Equity 28 Statement of Financial Position 29 Statement of Cash Flows 30 Notes to the Financial Statements

Interim Management 36 Report

Shareholder Information 38 Capital Structure and Conversion Between

Share Classes

39 Glossary of Terms and AlternativePerformance Measures (APMs)

42 Where to buy J.P. Morgan Investment Trusts 43 Information about the Company

Half Year Performance

F I N A N C I A L H I G H L I G H T S — G R O W T H

H A L F Y E A R P E R F O R M A N C E | 3

TOTAL RETURNS (INCLUDING DIVIDENDS REINVESTED)

GROWTH SHARE CLASS

1 Source: Morningstar.2 Source: J.P. Morgan, using net asset value per share, with debt at par value.3 The net asset value above is calculated on the basis that the Company’s Private Placement debt is valued at par value. The net asset value identified in the Company’smonthly fact sheet is calculated on the basis that the Company’s Private Placement debt is valued at fair value.

4 Source: MSCI. The Growth portfolio’s benchmark is the MSCI Europe ex UK Index (total return) in sterling terms.AAlternative performance measure (‘APM’).

A glossary of terms and APMs is provided on page 39.

Six months to Year to 3 Year 5 Year 30th September 2019 30th September 2019 Cumulative Cumulative

Return to shareholders1,A

Return on net assets2,3,A

Benchmark return4

Net asset return compared to benchmark return4

Interim dividend

+8.2% +15.9% +23.4% 47.7%

+7.9% +16.9% +26.7% +59.1%

+10.2% +18.9% +30.3% +53.9%

–2.3% –2.0% –3.6% +5.2%

4.85p

F I N A N C I A L H I G H L I G H T S — G R OW T H

4 | J P M O R G A N E U R O P E A N I N V E S T M E N T T R U S T P L C . H A L F Y E A R R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 9

SUMMARY OF RESULTS

FINANCIAL DATA

30th September 31st March % 2019 2019 change

Total net assets (£’000) 241,476 234,291 +3.1

Net asset value per share with debt at par value (p) 345.3 324.0 +6.6

Net asset value per share with debt at fair value (p)5,A 330.6 313.5 +5.5

Share price (p) 282.0 265.0 +6.4

Share price discount to net asset value per share with debt at par value (%)3,A 18.3 18.2

Share price discount to net asset value per share with debt at fair value (%)5,A 14.7 15.5

Number of shares in issue 69,941,803 72,306,030

Ongoing charges (%)A 1.04 1.01

Gearing (%)A 8.9 7.7

Six months to Year to Year to 30th September 31st March 31st MarchDividend 2019 2019 2018

Per Growth share 4.85p6 8.85p 6.85p

1 Source: Morningstar.2 Source: J.P. Morgan, using net asset value per share, with debt at par value.3 The net asset value above is calculated on the basis that the Company’s Private Placement debt is valued at par value. The net asset value identified in the Company’smonthly fact sheet is calculated on the basis that the Company’s Private Placement debt is valued at fair value.

4 Source: MSCI. The Growth portfolio’s benchmark is the MSCI Europe ex UK Index (total return) in sterling terms. Prior to 26th March 2013 the Growth portfolio’s benchmarkwas the FTSE All World Developed Europe (ex UK) Index in sterling terms. The benchmark index returns quoted above for periods of greater than five year are a compositeof the two indices, designed to provide an appropriate comparator to the return on net assets.

5 The fair value of the Company’s private placement has been calculated using discounted cash flow techniques, using the yield from a similarly dated German governmentbond plus a margin based on the five year average for the AA Barclays Euro corporate bond spread.

6 Paid on 11th October 2019.A Alternative performance measure (‘APM’).


LONG TERM PERFORMANCE FOR PERIOD ENDED 30TH SEPTEMBER 2019

JPMorgan European Growth – total return to shareholders1 JPMorgan European Growth – total return on net assets2,3 Benchmark total return4

15.9 16.9 18.9

118.399.9

47.759.1 53.9

23.4 26.730.3

020406080

100120140160

10 Year 5 Year 3 Year 1 Year

126.5

H A L F Y E A R P E R F O R M A N C E | 5

TOTAL RETURNS (INCLUDING DIVIDENDS REINVESTED)

INCOME SHARE CLASS

1 Source: Morningstar.2 Source: J.P. Morgan, using net asset value per share, with debt at par value.3 The net asset value above is calculated on the basis that the Company’s Private Placement debt is valued at par value. The net assets value identified in the Company’smonthly fact sheet is calculated on the basis that the Company’s Private Placement debt is valued at fair value.

4 Source: MSCI. The Income portfolio’s benchmark is the MSCI Europe ex UK Index (total return) in sterling terms.AAlternative performance measure (‘APM’).


Six months to Year to 3 Year 5 Year 30th September 2019 30th September 2019 Cumulative Cumulative

Return to shareholders1,A

Return on net assets2,3,A

Benchmark return4

Net asset return compared to benchmark return4

Interim dividend

+5.4% +9.1% +31.8% +52.4%

+7.2% +13.9% +31.5% +65.5%

+10.2% +18.9% +30.3% +53.9%

–3.0% –5.0% +1.2% +11.6%

2.8p

F I N A N C I A L H I G H L I G H T S — I N C O M E

F I N A N C I A L H I G H L I G H T S — I N C O M E


SUMMARY OF RESULTS

FINANCIAL DATA

30th September 31st March % 2019 2019 change

Total net assets (£’000) 181,335 173,539 +4.5

Net asset value per share with debt at par value (p) 180.3 172.0 +4.8

Net asset value per share with debt at fair value (p)5,A 173.9 167.4 +3.9

Share price (p) 149.0 144.0 +3.5

Share price discount to net asset value per share with debt at par value (%)3,A 17.4 16.3

Share price discount to net asset value per share with debt at fair value (%)5,A 14.3 14.0

Number of shares in issue 100,575,498 100,914,066

Ongoing charges (%)A 1.03 1.06

Gearing (%)A 5.3 2.5

Six months to Year to Year to 30th September 31st March 31st MarchDividend 2019 2019 2018

Per Income share 2.80p6 6.25p 5.80p

1 Source: Morningstar.2 Source: J.P. Morgan, using net asset value per share, with debt at par value. 3 The net asset value above is calculated on the basis that the Company’s Private Placement debt is valued at par value. The net asset value identified in the Company’smonthly fact sheet is calculated on the basis that the Company’s Private Placement debt is valued at fair value.

4 Source: MSCI. The Growth portfolio’s benchmark is the MSCI Europe ex UK Index (total return) in sterling terms. Prior to 26th March 2013 the Growth portfolio’s benchmarkwas the FTSE All World Developed Europe (ex UK) Index in sterling terms. The benchmark index returns quoted above for periods of greater than five year are a compositeof the two indices, designed to provide an appropriate comparator to the return on net assets.

5 The fair value of the Company’s private placement has been calculated using discounted cash flow techniques, using the yield from a similarly dated German governmentbond plus a margin based on the five year average for the AA Barclays Euro corporate bond spread.

6 1.40p paid on 19th July 2019 and 1.40p paid on 11th October 2019.A Alternative performance measure (‘APM’).


LONG TERM PERFORMANCE FOR PERIOD ENDED 30TH SEPTEMBER 2019

JPMorgan European Income– total return to shareholders1 JPMorgan European Income– total return on net assets2,3 Benchmark return4

9.113.9 18.9

148.3

114.4

52.4 65.5 53.931.8 31.5 30.3

020406080

100120140160180

10 Year 5 Year 3 Year 1 Year

162.2

Chairman’s Statement

C H A I R M A N ’ S S T A T E M E N T


In this six month reporting period to 30th September 2019, the Company delivered positive returns toshareholders on both its Growth and Income shares. More details on the performance and dividends ofeach of the Company’s share classes and the different ways to measure performance are provided below.

Growth Portfolio

Return to shareholders and return on net assets

The return to shareholders for the Company’s Growth shares was +8.2%. This measurement ofperformance takes into account share price movements and income received by way of dividend. It is theindustry norm and assumes that the dividend has been reinvested.

The return on net assets (debt at par value) with dividends reinvested for the Company’s Growth shares was+7.9%.

The return on net assets is measured by net asset value movements and this can be looked at in differentways depending on the accounting treatment of the Company’s private placement, which is a long termdebt. The accounting policy of the Company, which is in line with accounting standards, recognises ‘debt atpar value’ and amortises the debt principal. Market participants also want to know the impact ofrecognising ‘debt at fair value’, so performance is quoted for both bases. Further details on thesecalculations are included in the Glossary of Terms and Alternative Performance Measures on page 39.

The return on net asset value (debt at fair value) with dividends reinvested for the Company’s Growthshares was +6.8%. The annual figure for this latter return is detailed in the Company’s Annual Report.

For this period under review, both returns to shareholders and on net assets are below the Company’sbenchmark index, the MSCI Europe ex UK Index total return in sterling terms (the ‘Index’), which increasedby 10.2%. Looking longer term, the return on net assets over five and ten year comfortably outperformedthe index.

The discount at which the Growth shares were trading below the prevailing net asset value did not changesignificantly since the financial year end but remained high, reflecting continuing negative marketsentiment towards Europe.

Dividends

For the Company’s Growth shares, the Board’s aim is that annual dividend payments are sufficient tomaintain the Company’s investment trust status. Revenue return per share on the Growth portfolio for thesix months to 30th September 2019 (calculated by reference to the average number of shares in issue overthe period) amounted to 6.97 pence per share (2018: 8.01 pence per share). A first interim dividend of4.85 pence per share (2018: 4.85 pence per share) was paid on 11th October 2019. The timing of thedividend declarations for the Growth second interim is expected to continue to be made ahead of theannual conversion opportunity in March each year.

Income Portfolio

Return to shareholders and return on net assets

The return to shareholders with dividends reinvested for the Company’s Income shares was +5.4%.

The return on net assets (debt at par value) with dividends reinvested for the Company’s Income shareswas +7.2%.

As with the growth portfolio, for this period under review, both returns to shareholders and on net assetswere below the Company’s benchmark index. Looking longer term, the return on net assets over three, fiveand ten years comfortably outperformed the benchmark.

Josephine DixonChairman


C H A I R M A N ’ S S T A T E M E N T | 9

The return on net asset value (debt at fair value) with dividends reinvested for the Company’s Incomeshares was +6.3%. The annual figures for this latter return is detailed in the Company’s Annual Report.

As with the growth portfolio, the discount did not change significantly since the financial year end for thesame reason.

Dividends

For the Company’s Income shares, the Board’s aim is to provide a regular stream of dividend income on aquarterly basis, subject to the availability of distributable reserves. Revenue return per share on theIncome portfolio for the half year (again, calculated by reference to the average number of shares in issueover the period) amounted to 4.95 pence per share (2018: 5.01 pence per share). The first quarterly interimdividend of 1.40 pence per share (2018: 1.25 pence per share) was paid on 19th July 2019 and a secondquarterly interim dividend also of 1.40 pence per share (2018: 1.25 pence per share) was paid on11th October 2019. A third quarterly interim dividend of 1.40 pence per share (2018: 1.25 pence per share)was declared on 19th November 2019 for payment on 10th January 2020.

The timing of the dividend declarations for the Income fourth interim is expected to continue to be madeahead of the annual conversion opportunity in March each year.

In their Report on page 12, the Investment Managers comment on some of the factors underlying theperformance of the two portfolios over the Company’s six month period, as well as commenting on theeconomic and market background.

GearingThere has been no change in the Investment Manager’s permitted gearing range, as previously set by theBoard, of between 10% net cash to 20% geared. At 30th September 2019 the Growth portfolio was 8.9%geared and the Income portfolio was 5.3% geared. These levels of gearing as quoted in this Half YearReport and Financial Statements are before the application of derivatives, such as futures, which can beused by the Investment Managers to either increase or decrease the effective rate of the Company’sgearing, according to market conditions. The Company’s net gearing including derivatives is included withthe Company’s daily published net asset value.

ConversionsShareholders in either of the two Company’s share classes are able to convert some or all of their sharesinto shares of the other class without such disposal being treated as a disposal for capital gains purposes.The Company’s next share conversion will be in March 2020 and details of the process will be posted on theCompany’s website in late January 2020.

Share RepurchasesThe Board remains of the view that it is important to seek to address imbalances in the supply of anddemand for the Company’s shares and to thereby minimise the volatility and absolute level of the discountto net asset value at which the Company’s shares currently trade. The Board does not wish to see thediscounts widen beyond 10% (using the cum-income NAV) on an ongoing basis. The precise level andtiming of repurchases pursuant to this policy depend upon prevailing market conditions. Over the sixmonths under review the discount levels have averaged 12.0% for the Growth shares and 11.2% for theIncome Shares (both at fair value and on a cum-income NAV basis). Accordingly, over the six month periodthe Company repurchased a total of 2,364,227 Growth shares and 338,568 Income shares.


1 0 | J P M O R G A N E U R O P E A N I N V E S T M E N T T R U S T P L C . H A L F Y E A R R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 9

Transfer of Reserves between the Growth and Income PortfoliosAs in the previous year, the Board has exercised its power to approve transfers of retained revenuereserves from JETG to JETI in exchange for the equivalent amount of capital reserves from JETI to JETG.£1.348 million was transferred to JETI in exchange for the equivalent amount of capital reserves from JETIto JETG, being the amount of JETG’s retained revenue reserve as at 31st March 2019, after payment on5th April 2019 of the JETG 4.00p dividend. This transfer is reflected in this Half Year Report and FinancialStatements.

Board of DirectorsAs referred to in my Chairman’s Statement of the Company’s Annual Report and Financial Statements to31st March 2019, the Board was pleased to announce that Rita Dhut was appointed to the Board on4th June 2019. Rita Dhut has 18 years’ asset management experience in UK and continental Europeanequities with roles including Director of European Equities at M&G and Head of Pan European Equity ValueInvesting at Aviva Investors.

OutlookThe Board and Managers are mindful of the economic and political uncertainties of investing in Europewhich currently include concerns about future economic growth the influence of populist parties and Brexit,together with ongoing trade tensions between the US and China, which impacts global stock markets.However, we think that, within the Company’s risk parameters and investment methodology, positivereturns are achievable over the medium and longer term.

For and on behalf of the BoardJosephine DixonChairman 29th November 2019

Investment Review


I N V E S T M E N T M A N A G E R S ’ R E P O R T

Stephen Macklow-SmithInvestment Manager

Alexander Fitzalan HowardInvestment Manager

Michael BarakosInvestment Manager

Thomas BuckinghamInvestment Manager

Review

The Company’s half year to 30th September 2019, saw markets in Europe ex UK trade modestly higher insterling terms. In many ways the investment background deteriorated: growth expectations weredowngraded everywhere as trade suffered from the continuing trade tensions between the US and China.The slowdown was particularly acute in manufacturing, with confidence indicators reaching recessionarylevels. The manufacturing sector is, though, less significant in developed markets, and services remainedfairly buoyant, boosted by continued rises in overall employment and contained inflation helping increasesin real incomes.

Central Banks have become unequivocally dovish, with the US Federal Reserve, having signalled higherrates at the end of 2018, changing tack and embarking on a new easing cycle. The European Central Bankunveiled a new programme of asset purchases, and also committed to ultra-low interest rates. Inflation hasfailed to lift off anywhere in this cycle, and there are few signs of inflationary pressure building.

The slowdown in economic growth had a negative impact on profits expectations, and whereas at the startof the year European equities were expected to see increases of around 8%, as of the time of writing thishas been revised to less than 1% for 2019. Europe is not alone in seeing pressure on earnings, which areflat in the US, and falling in the UK, Japan, and Emerging Markets.

Against this background both of the Company’s share classes saw NAV performance lag the market. In theIncome class dividend stocks came under pressure despite the generally low interest rate environment. Inthe Growth class we always have an overweight position in value stocks. Unfortunately value stocksunderperformed again as yield curves remained flat. This is because a flat yield curve is seen by bondmarkets as an indication that economic growth rates will be depressed, which is generally, not anenvironment that favours value stocks. The performance of value stocks has fallen since 2017, when theywere achieving respectable levels of performance, but are now down to low levels not seen since thetechnology, media and telecoms bubble (dot.com bubble) at the turn of the millennium. We remainconvinced that it is appropriate to have an exposure to value, since to our mind the market is excessivelypessimistic about future economic expansion; however, in the short term it is not helping us.

Outlook

Economic growth everywhere is expected to be low in 2020, with little or no recovery from 2019 levels.The dampening impact on confidence is coming from the political arena, whether that is trade tensions asthe US flexes its global muscles, or more locally with continued uncertainty over Brexit. In contrast,monetary policy is supportive, and investors are facing a challenge as they try to generate returns in aworld of zero or negative interest rates. In this environment equities which yield substantially more thancash have their attractions, and we think that they should be a core source of growth for investors.

Stephen Macklow-SmithAlexander Fitzalan HowardMichael BarakosThomas BuckinghamInvestment Managers 29th November 2019

I N V E S T M E N T R E V I E W | 1 3

L I S T O F I N V E S T M E N T S – G R O W T H

ValuationCompany £’000



SWITZERLANDNestlé 16,644

Roche 11,728

Novartis 10,983

LafargeHolcim 4,342

Swiss Life 3,469

UBS 3,424

Adecco 1,964

Partners 1,205

Landis + Gyr 941

Sonova 608

Gurit 504

Vetropack 330

Huber + Suhner 326

Zurich Insurance 272

Julius Baer 202

Lastminute.com 105

57,047

FRANCEAirbus 5,106

Peugeot 4,242

LVMH Moet Hennessy Louis Vuitton 4,181

Schneider Electric 4,065

Capgemini 3,593

BNP Paribas 3,300

Danone 3,079

Eiffage 2,970

Safran 2,890

Vinci 2,715

L’Oreal 2,207

Credit Agricole 2,019

Gaztransport Et Technigaz 1,715

Kaufman & Broad 1,689

Sanofi 1,671

TOTAL 1,217

Pernod Ricard 954

Rothschild 859

Quadient 773

Vivendi 766

FRANCE CONT.Metropole Television 553

Air France-KLM 517

Arkema 449

Atos 350

Sword 168

Fnac Darty 107

52,155

GERMANYAllianz 7,456

adidas 4,723

Deutsche Telekom 4,679

SAP 4,097

Dialog Semiconductor 3,767

Deutsche Boerse 2,946

RWE 2,805

HeidelbergCement 2,411

CECONOMY 2,082

Hannover Rueck 1,977

Deutsche Pfandbriefbank 1,640

Muenchener Rueckversicherungs-

Gesellschaft 1,458

MTU Aero Engines 1,407

TeamViewer 1,403

CTS Eventim 1,325

E.ON 1,175

Knorr-Bremse 1,004

Volkswagen Preference 892

Eckert & Ziegler 874

Varta 813

Befesa 735

Corestate Capital 495

Hamburger Hafen und Logistik 448

2G Energy 321

Carl Zeiss Meditec 318

Amadeus Fire 297

Wirecard 231

Bayer 138

51,917

NETHERLANDSUnilever 4,752

Wolters Kluwer 4,655

ASML 4,571

Signify 2,279

ASM International 2,111

Royal Dutch Shell 1,183

Adyen 1,131

Koninklijke Philips 1,079

ING 917

Heijmans 744

NIBC 700

ABN AMRO 397

24,519

SPAINEndesa 3,974

ACS Actividades de Construccion

y Servicios 3,796

Aena SME 2,950

Repsol 2,017

Mediaset Espana Comunicacion 1,081

Telefonica 703

International Consolidated Airlines 483

Vidrala 287

Merlin Properties Socimi 199

15,490

ITALYUnipol Gruppo 2,463

Enel 1,629

Snam 1,608

Fiat Chrysler Automobiles 1,127

Azimut 741

UniCredit 661

Gamenet 542

Banca Generali 482

Prysmian 474

Eni 407

Unieuro 352

Buzzi Unicem 247

Poste Italiane 243

Cairo Communication 137

Rizzoli Corriere Della Sera Mediagroup 132

Falck Renewables 103

11,348

LIST OF INVESTMENTS

AT 30TH SEPTEMBER 2019


L I S T O F I N V E S T M E N T S – G R O W T H



DENMARKNovo Nordisk 5,427

Topdanmark 2,101

Carlsberg 1,445

Royal Unibrew 177

Matas 173

9,323

AUSTRIAOMV 3,725

Wienerberger 2,134

Verbund 1,265

Raiffeisen Bank International 1,002

AT&S Austria Technologie &

Systemtechnik 340

Flughafen Wien 163

8,629

NORWAYTelenor 2,315

SpareBank 1 SMN 1,041

Fjordkraft 925

DNB 762

Norwegian Finans 653

DNO 328

Selvaag Bolig 241

Crayon 205

Scottish Salmon 102

6,572

SWEDENSandvik 1,519

Swedish Match 1,030

Lindab International 614

Tethys Oil 548

Concentric 454

Volvo 439

Boliden 399

EQT 187

Evolution Gaming 140

Betsson 70

5,400

BELGIUMBarco 1,297

KBC 1,257

Telenet 1,242

3,796

FINLANDNeste 2,284

Valmet 34

2,318

COLLECTIVE INVESTMENT SCHEMESJPMorgan European Smaller

Companies Trust 9,001

JPMorgan Funds – Europe Dynamic

Small Cap Fund 4,230

JPMorgan Funds – Emerging Europe

Equity Fund 1,281

TOTAL COLLECTIVE INVESTMENT SCHEMES 14,512

TOTAL INVESTMENTS 263,0261

1 See page 28 Fixed assets.

LIST OF INVESTMENTS – continued


P O R T F O L I O I N F O R M A T I O N – G R O W T H

GEOGRAPHICAL ANALYSIS

30th September 2019 31st March 2019 Portfolio1 Benchmark Portfolio1 Benchmark % % % %

Switzerland 22.7 20.3 20.3 19.4

France 20.5 24.5 21.5 24.6

Germany 20.2 18.4 17.7 18.7

Netherlands 9.7 8.6 10.5 7.8

Spain 6.0 6.3 6.3 6.5

Italy 5.2 5.0 3.9 5.2

Denmark 3.6 3.8 3.9 3.9

Austria 3.3 0.5 3.0 0.5

Sweden 2.8 5.5 4.3 5.8

Norway 2.7 1.4 3.1 1.6

Belgium 1.5 2.2 1.4 2.2

Finland 0.9 2.1 2.9 2.2

United Kingdom2 0.4 — 0.5 —

Russia 0.3 — 0.3 —

Poland 0.1 — 0.1 —

Hungary 0.1 — — —

Ireland — 1.1 — 1.2

Portugal — 0.3 0.3 0.4

Total Portfolio3 100.0 100.0 100.0 100.0

1 Based on total investments of £263.0m (31st March 2019: £252.4m).2 The Company has a holding in JPMorgan Europe Dynamic Small Cap, which holds some UK stocks. This gives rise to the 0.4% holding in the UK identified above.3 Includes investments in collective investment schemes which are reclassified in accordance with the domicile of the underlying assets in the fund.


P O R T F O L I O I N F O R M A T I O N – G R O W T H

SECTOR ANALYSIS


Financials 20.3 16.9 21.5 17.5

Industrials 17.3 14.6 17.4 14.6

Health Care 12.6 14.4 13.5 14.3

Consumer Staples 11.6 14.2 11.7 13.6

Information Technology 9.7 7.5 6.9 7.2

Consumer Discretionary 8.0 11.0 8.4 10.4

Utilities 5.3 4.9 4.8 4.5

Energy 5.3 3.9 6.0 4.8

Communications Services 5.1 4.5 3.0 4.7

Materials 4.4 6.6 5.3 6.8

Real Estate 0.4 1.5 1.5 1.6

Total2 100.0 100.0 100.0 100.0

1 Based on total investments of £263.0m (31st March 2019: £252.4m).2 Includes investments in collective investment schemes which are reclassified in accordance with the industry of the underlying asset in the fund.


S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E – G R O W T H

FOR THE SIX MONTHS ENDED 30TH SEPTEMBER 2019

(Unaudited) (Unaudited) (Audited)Six months ended Six months ended Year ended

30th September 2019 30th September 2018 31st March 2019Revenue Capital Total Revenue Capital Total Revenue Capital Total£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Gains/(losses) on investments and derivatives held at fair value through profit or loss — 13,355 13,355 — 7,277 7,277 — (12,016) (12,016)

Net foreign currency(losses)/gains — (441) (441) — (614) (614) — 335 335

Income from investments 6,280 — 6,280 7,031 — 7,031 9,158 — 9,158Interest receivable and similar

income 111 — 111 14 — 14 50 — 50

Gross return/(loss) 6,391 12,914 19,305 7,045 6,663 13,708 9,208 (11,681) (2,473)Management fee (291) (679) (970) (304) (708) (1,012) (584) (1,362) (1,946)Other administrative expenses (278) — (278) (270) — (270) (478) — (478)

Net return/(loss) before finance costs and taxation 5,822 12,235 18,057 6,471 5,955 12,426 8,146 (13,043) (4,897)

Finance costs (113) (265) (378) (117) (274) (391) (223) (522) (745)

Net return/(loss) before taxation 5,709 11,970 17,679 6,354 5,681 12,035 7,923 (13,565) (5,642)

Taxation (733) — (733) (526) — (526) (176) — (176)

Net return/(loss) after taxation 4,976 11,970 16,946 5,828 5,681 11,509 7,747 (13,565) (5,818)

Return/(loss) per Growth share 6.97p 16.76p 23.73p 8.01p 7.81p 15.82p 10.68p (18.71)p (8.03)p

All revenue and capital items in the above statement derive from continuing operations.

The ‘Total’ column of this statement is the profit and loss account of the Company and the ‘Revenue’ and ‘Capital’ columns representsupplementary information prepared under guidance issued by the Association of Investment Companies.

Net return after taxation represents the profit for the period/year and also the total comprehensive income.


S T A T E M E N T O F F I N A N C I A L P O S I T I O N – G R O W T H


(Unaudited) (Unaudited) (Audited)30th September 2019 30th September 2018 31st March 2019

£’000 £’000 £’000

Fixed assetsInvestments held at fair value through profit or loss 263,026 278,594 252,446

Current assetsDerivative financial assets 50 86 99Debtors 3,481 1,294 1,416Cash and cash equivalents 8,874 9,856 13,408

12,405 11,236 14,923Current liabilitiesCreditors: amounts falling due within one year (7,957) (7,920) (7,669)Derivative financial liabilities (338) (407) (419)

Net current assets 4,110 2,909 6,835

Total assets less current liabilities 267,136 281,503 259,281Creditors: amounts falling due after more than one year (25,660) (25,827) (24,990)

Net assets 241,476 255,676 234,291

Net asset value per Growth share 345.3p 352.4p 324.0p


L I S T O F I N V E S T M E N T S – I N C O M E




FRANCESanofi 3,905

BNP Paribas 2,130

Vinci 2,103

AXA 2,036

Schneider Electric 1,870

Engie 1,483

Orange 1,438

Cie de Saint-Gobain 1,074

Cie Generale des Etablissements

Michelin 1,050

Peugeot 960

Veolia Environnement 941

Covivio 937

Credit Agricole 849

Gaztransport Et Technigaz 818

CNP Assurances 783

Bouygues 753

Publicis Groupe 744

Eiffage 672

SCOR 652

Gecina 623

Amundi 613

Suez 609

SPIE 489

ICADE 487

Rexel 481

ALD 475

Television Francaise 1 449

Coface 445

Altarea 436

Kaufman & Broad 423

Metropole Television 407

Lagardere 353

HEXAOM 226

31,714

SWITZERLANDRoche 6,842

Novartis 6,294

Zurich Insurance 2,426

UBS 1,819

Swiss Re 1,520

Credit Suisse 1,396

LafargeHolcim 1,135

Swiss Life 1,036

Swisscom 826

Adecco 661

Galenica 457

24,412

GERMANYAllianz 3,832

Deutsche Telekom 2,294

Muenchener Rueckversicherungs-

Gesellschaft 1,779

Volkswagen Preference 1,541

Deutsche Post 1,467

E.ON 1,083

RWE 1,056

Hannover Rueck 743

HeidelbergCement 707

Evonik Industries 591

METRO 580

Aroundtown 554

HOCHTIEF 554

Amadeus Fire 536

DIC Asset 515

Deutsche Pfandbriefbank 504

RTL 501

Aareal Bank 489

Freenet 473

Corestate Capital 468

Siltronic 447

GERMANY CONT.DWS 431

Talanx 419

Hamborner REIT 414

Zeal Network 388

bet-at-home.com 371

TAG Immobilien 369

Takkt 358

Bijou Brigitte 271

23,735

ITALYEnel 2,530

Eni 1,636

Assicurazioni Generali 1,430

Snam 891

Poste Italiane 877

Terna Rete Elettrica Nazionale 852

Mediobanca Banca di Credito Finanziario 834

Fiat Chrysler Automobiles 832

Unipol Gruppo 769

Telecom Italia 709

Italgas 612

ACEA 612

Banca Generali 544

Azimut 533

A2A 530

Societa Iniziative Autostradali e Servizi 519

Enav 516

Societa Cattolica di Assicurazioni 512

Ascopiave 489

Banca Mediolanum 479

RAI Way 473

Iren 468

ERG 457

Anima 451

Unieuro 442

Gamenet 436

doValue 432

Zignago Vetro 419

Rizzoli Corriere Della Sera Mediagroup 402

Cairo Communication 351

COIMA RES 211

21,248

LIST OF INVESTMENTS




LIST OF INVESTMENTS – continued




SWEDENTele2 1,079

Volvo 1,075

Hennes & Mauritz 971

Skandinaviska Enskilda Banken 936

Svenska Handelsbanken 847

Telia 829

SKF 673

Skanska 659

Swedish Match 656

Lundin Petroleum 632

Boliden 626

Electrolux 618

JM 535

Catella 524

NP3 Fastigheter 481

Clas Ohlson 481

Castellum 476

Resurs 466

Tethys Oil 463

Peab 459

Intrum 457

Bilia 452

NetEnt 449

Scandic Hotels 443

Nobina 435

Axfood 433

Inwido 426

Dios Fastigheter 426

Nobia 425

Coor Service Management 418

Bonava 417

Nordic Waterproofing 404

Dustin 338

Thule 319

EQT 281

New Wave 226

Betsson 209

NP3 Fastigheter Preference 47

20,091

SPAINIberdrola 2,762

Telefonica 1,583

Banco Bilbao Vizcaya Argentaria 1,516

Industria de Diseno Textil 1,239

Repsol 1,186

Aena SME 818

ACS Actividades de Construccion y

Servicios 813

Endesa 793

Naturgy Energy 769

Red Electrica 757

Enagas 617

Mapfre 536

International Consolidated Airlines 496

Merlin Properties Socimi 481

Mediaset Espana Comunicacion 475

Cia de Distribucion Integral Logista 399

Euskaltel 384

Acciona 363

15,987

NORWAYEquinor 1,077

DNB 1,021

Telenor 905

SpareBank 1 Nord Norge 769

Mowi 756

SpareBank 1 SR-Bank 721

SpareBank 1 SMN 718

Yara International 687

Gjensidige Forsikring 568

Aker BP 557

Selvaag Bolig 542

Sparebanken More 530

Fjordkraft 515

TGS Nopec Geophysical 490

Evry 483

Veidekke 480

Storebrand 465

AF Gruppen 450

NORWAY CONT.Sparebanken Vest 448

Atea 445

SpareBank 1 443

Europris 440

Sparebank 1 Oestlandet 436

Entra 420

Norway Royal Salmon 367

Grieg Seafood 349

Kvaerner 322

15,404

NETHERLANDSUnilever 3,339

Koninklijke Ahold Delhaize 1,393

Koninklijke KPN 828

NN 782

Aegon 693

Randstad 616

ASR Nederland 603

NSI 508

Van Lanschot Kempen 488

Signify 471

Koninklijke Volkerwessels 452

NIBC 445

Royal Dutch Shell 431

Intertrust 407

Koninklijke BAM 336

ABN AMRO 299

12,091





BELGIUMKBC 989

Ageas 831

Solvay 701

Proximus 602

Intervest Offices & Warehouses 493

Leasinvest Real Estate 489

Telenet 475

Retail Estates 462

Cofinimmo 455

Befimmo 449

Warehouses De Pauw 448

EVS Broadcast Equipment 431

Ascencio 308

Home Invest Belgium 129

7,262

FINLANDElisa 857

Fortum 756

Stora Enso 675

Metso 597

Orion 575

Kemira 517

Tokmanni 514

Sanoma 464

Cramo 463

Kesko 435

Aktia Bank 421

DNA 397

CapMan 172

Valmet 32

6,875

AUSTRIAErste Group Bank 733

OMV 666

Raiffeisen Bank International 551

BAWAG 470

Vienna Insurance 455

Strabag 441

Porr 436

UBM Development 425

UNIQA Insurance 412

4,589

PORTUGALEDP – Energias de Portugal 804

Galp Energia 698

Sonae 450

NOS 438

REN – Redes Energeticas Nacionais 423

2,813

IRELANDSmurfit Kappa 654

C&C 577

Irish Residential Properties REIT 427

Greencoat Renewables 421

FBD 282

Origin Enterprises 139

2,500

DENMARKTryg 528

Spar Nord Bank 503

Topdanmark 464

Scandinavian Tobacco 425

Matas 304

TCM 73

2,297

TOTAL INVESTMENTS 191,0181

1 See page 28 Fixed assets.


P O R T F O L I O I N F O R M A T I O N – I N C O M E

GEOGRAPHICAL ANALYSIS


France 16.6 24.5 17.3 24.6

Switzerland 12.8 20.3 9.2 19.4

Germany 12.4 18.4 12.7 18.7

Italy 11.1 5.0 9.7 5.2

Sweden 10.5 5.5 10.5 5.8

Spain 8.4 6.3 7.5 6.5

Norway 8.1 1.4 8.7 1.6

Netherlands 6.3 8.6 7.8 7.8

Belgium 3.8 2.2 3.9 2.2

Finland 3.6 2.1 5.3 2.2

Austria 2.4 0.5 1.8 0.5

Portugal 1.5 0.3 1.7 0.4

Ireland 1.3 1.1 1.2 1.2

Denmark 1.2 3.8 2.7 3.9

Total 100.0 100.0 100.0 100.0

1 Based on total investments of £191.0m (31st March 2019: £177.9m).

SECTOR ANALYSIS


Financials 27.5 16.9 23.8 17.5

Industrials 13.0 14.6 9.4 14.6

Utilities 11.1 4.9 10.1 4.5

Communications Services 9.8 4.5 8.7 4.7

Health Care 9.5 14.4 10.3 14.3

Consumer Discretionary 8.3 11.0 9.2 10.4

Real Estate 6.5 1.5 8.0 1.6

Consumer Staples 5.2 14.2 6.7 13.6

Energy 4.7 3.9 8.6 4.8

Materials 3.5 6.6 3.3 6.8

Information Technology 0.9 7.5 1.9 7.2

Total 100.0 100.0 100.0 100.0

1 Based on total investments of £191.0m (31st March 2019: £177.9m).


S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E – I N C O M E



30th September 2019 30th September 2018 31st March 2019Revenue Capital Total Revenue Capital Total Revenue Capital Total£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000


Net foreign currency gains — 328 328 — 368 368 — 931 931Income from investments 6,072 — 6,072 6,283 — 6,283 8,706 — 8,706Interest receivable and similar

income 59 — 59 23 — 23 70 — 70

Gross return/(loss) 6,131 7,881 14,012 6,306 4,781 11,087 8,776 (3,555) 5,221Management fee (300) (450) (750) (309) (463) (772) (602) (903) (1,505)Other administrative expenses (165) — (165) (191) — (191) (362) — (362)

Net return/(loss) before finance costs and taxation 5,666 7,431 13,097 5,806 4,318 10,124 7,812 (4,458) 3,354

Finance costs (107) (160) (267) (116) (173) (289) (218) (328) (546)

Net return/(loss) before taxation 5,559 7,271 12,830 5,690 4,145 9,835 7,594 (4,786) 2,808

Taxation (569) — (569) (594) — (594) (696) — (696)

Net return/(loss) after taxation 4,990 7,271 12,261 5,096 4,145 9,241 6,898 (4,786) 2,112

Return/(loss) per Income share 4.95p 7.21p 12.16p 5.01p 4.07p 9.08p 6.79p (4.71)p 2.08p



Net return/(loss) after taxation represents the profit/(loss) for the period/year and also the total comprehensive income.


S T A T E M E N T O F F I N A N C I A L P O S I T I O N – I N C O M E


(Unaudited) (Unaudited) (Audited)30th September 2019 30th September 2018 31st March 2019

£’000 £’000 £’000

Fixed assetsInvestments held at fair value through profit or loss 191,018 192,714 177,920

Current assetsDerivative financial assets 78 203 298Debtors 4,829 902 3,142Cash and cash equivalents 16,868 15,337 15,779

21,775 16,442 19,219Current liabilitiesCreditors: amounts falling due within one year (12,993) (5,670) (5,500)Derivative financial liabilities (91) (598) (206)

Net current assets 8,691 10,174 13,513

Total assets less current liabilities 199,709 202,888 191,433Creditors: amounts falling due after more than one year (18,374) (18,493) (17,894)

Net assets 181,335 184,395 173,539

Net asset value per Income share 180.3p 181.4p 172.0p

Financial Statements


S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E



30th September 2019 30th September 2018 31st March 2019Revenue Capital Total Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000


Net foreign currency (losses)/gains — (113) (113) — (246) (246) — 1,266 1,266

Income from investments 12,352 — 12,352 13,314 — 13,314 17,864 — 17,864Interest receivable and similar income 170 — 170 37 — 37 120 — 120

Gross return/(loss) 12,522 20,795 33,317 13,351 11,444 24,795 17,984 (15,236) 2,748Management fee (591) (1,129) (1,720) (613) (1,171) (1,784) (1,186) (2,265) (3,451)Other administrative expenses (443) — (443) (461) — (461) (840) — (840)

Net return/(loss) before finance costs and taxation 11,488 19,666 31,154 12,277 10,273 22,550 15,958 (17,501) (1,543)

Finance costs (220) (425) (645) (233) (447) (680) (441) (850) (1,291)

Net return/(loss) before taxation 11,268 19,241 30,509 12,044 9,826 21,870 15,517 (18,351) (2,834)

Taxation (1,302) — (1,302) (1,120) — (1,120) (872) — (872)

Net return/(loss) after taxation 9,966 19,241 29,207 10,924 9,826 20,750 14,645 (18,351) (3,706)

Return/(loss) per share(note 3):

Growth share 6.97p 16.76p 23.73p 8.01p 7.81p 15.82p 10.68p (18.71)p (8.03)pIncome share 4.95p 7.21p 12.16p 5.01p 4.07p 9.08p 6.79p (4.71)p 2.08p



Net return/(loss) after taxation represents the profit/(loss) for the period/year and also the total comprehensive income.

F I N A N C I A L S T A T E M E N T S | 2 7

S T A T E M E N T O F C H A N G E S I N E Q U I T Y


Called up Capitalshare Share redemption Capital Revenuecapital premium reserve reserves1 reserve1 Total£’000 £’000 £’000 £’000 £’000 £’000

Six months ended 30th September 2019 (Unaudited)

At 31st March 2019 4,975 103,826 15,149 271,714 12,166 407,830 Repurchase and cancellation of the Company’s own shares (126) — 126 (7,413) — (7,413)

Net return — — — 19,241 9,966 29,207 Dividends paid in the period (note 4) — — — — (6,813) (6,813)

At 30th September 2019 4,849 103,826 15,275 283,542 15,319 422,811

Six months ended 30th September 2018(Unaudited)

At 31st March 2018 5,023 100,773 15,062 296,538 8,741 426,137 Repurchase and cancellation of the Company’s own shares (27) — 27 (1,657) — (1,657)

Net return — — — 9,826 10,924 20,750 Dividends paid in the period (note 4) — — — — (5,159) (5,159)

At 30th September 2018 4,996 100,773 15,089 304,707 14,506 440,071

Year ended 31st March 2019 (Audited)At 31st March 2018 5,023 100,773 15,062 296,538 8,741 426,137 Repurchase and cancellation of theCompany’s own shares (48) — 48 (3,381) — (3,381)

Share conversions during the year — 3,053 39 (3,092) — —Net (loss)/return — — — (18,351) 14,645 (3,706)Dividends paid in the year (note 4) — — — — (11,220) (11,220)

At 31st March 2019 4,975 103,826 15,149 271,714 12,166 407,830

1 These reserves form the distributable reserves of the Company and may be used to fund distributions to investors via dividend payments.


S T A T E M E N T O F F I N A N C I A L P O S I T I O N


(Unaudited) (Unaudited) (Audited) 30th September 2019 30th September 31st March 2018 2019 Growth Income Total Total Total £’000 £’000 £’000 £’000 £’000

Fixed assetsInvestments held at fair value through

profit or loss 263,026 191,018 454,044 471,308 430,366

Current assetsDerivative financial assets 50 78 128 289 397 Debtors 3,481 4,829 8,310 2,196 4,558 Cash and cash equivalents 8,874 16,868 25,742 25,193 29,187

12,405 21,775 34,180 27,678 34,142Current liabilitiesCreditors: amounts falling due within one year (7,957) (12,993) (20,950) (13,590) (13,169)

Derivative financial liabilities (338) (91) (429) (1,005) (625)

Net current assets 4,110 8,691 12,801 13,083 20,348

Total assets less current liabilities 267,136 199,709 466,845 484,391 450,714 Creditors: amounts falling due after more than one year (25,660) (18,374) (44,034) (44,320) (42,884)

Net assets 241,476 181,335 422,811 440,071 407,830

Capital and reservesCalled up share capital 2,754 2,095 4,849 4,996 4,975 Share premium reserve 14,709 89,117 103,826 100,773 103,826 Capital redemption reserve 13,852 1,423 15,275 15,089 15,149 Capital reserves 203,819 79,723 283,542 304,707 271,714 Revenue reserve 6,342 8,977 15,319 14,506 12,166

Total shareholders’ funds 241,476 181,335 422,811 440,071 407,830

Net asset values (note 5):Net asset value per Growth share 345.3p 352.4p 324.0pNet asset value per Income share 180.3p 181.4p 172.0p


S T A T E M E N T O F C A S H F L O W S


(Unaudited) (Unaudited) (Audited)Six months ended Six months ended Year ended30th September 30th September 31st March

2019 2018 2019£’000 £’000 £’000

Net cash outflow from operations before dividends and interest (note 6) (1,384) (1,571) (4,526)

Dividends received 12,198 11,635 14,277 Interest received 93 — 4 Overseas tax recovered 239 272 1,388

Net cash inflow from operating activities 11,146 10,336 11,143

Purchases of investments and derivatives (132,873) (139,145) (248,805)Sales of investments and derivatives 133,182 130,771 251,740 Settlement of future contracts (773) 17 424 Settlement of foreign currency contracts 733 584 438

Net cash inflow/(outflow) from investing activities 269 (7,773) 3,797

Dividends paid (6,813) (5,159) (11,220)Repurchase and cancellation of the Company’s own shares (7,408) (1,657) (3,381)Interest paid (637) (674) (1,291)Repayment of bank loans — (13,477) (13,477)Drawdown of bank loans — 13,528 13,528

Net cash outflow from financing activities (14,858) (7,439) (15,841)

Decrease in cash and cash equivalents (3,443) (4,876) (901)

Cash and cash equivalents at start of period/year 29,187 30,078 30,078 Exchange movements (2) (9) 10 Cash and cash equivalents at end of period/year 25,742 25,193 29,187

Decrease in cash and cash equivalents (3,443) (4,876) (901)

Cash and cash equivalents consist of: Cash and short term deposits 6,246 5,032 6,547 Cash held in JPMorgan Euro Liquidity Fund 19,496 20,161 22,640

Total 25,742 25,193 29,187


N O T E S T O T H E F I N A N C I A L S T A T E M E N T S


1. Financial statements

The information contained within the financial statements in this half year report has not been audited or reviewed by theCompany’s auditors.

The figures and financial information for the year ended 31st March 2019 are extracted from the latest published financialstatements of the Company and do not constitute statutory accounts for that year. Those financial statements have beendelivered to the Registrar of Companies and including the report of the auditors which was unqualified and did not containa statement under either section 498(2) or 498(3) of the Companies Act 2006.

2. Accounting policies

The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 ‘The Financial ReportingStandard applicable in the UK and Republic of Ireland’ of the United Kingdom Generally Accepted Accounting Practice(‘UK GAAP’) and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and VentureCapital Trusts’ (the revised ‘SORP’) issued by the Association of Investment Companies in November 2014 and updated inOctober 2019.

FRS 104, ‘Interim Financial Reporting’, issued by the Financial Reporting Council (‘FRC’) in March 2015 has been applied inpreparing this condensed set of financial statements for the six months ended 30th September 2019.

All of the Company’s operations are of a continuing nature.

The accounting policies applied to this condensed set of financial statements are consistent with those applied in the financialstatements for the year ended 31st March 2019.



3. Return/(loss) per share


Growth Share 2019 2018 2019

Return per share is based on the following:Revenue return 4,976 5,828 7,747 Capital return/(loss) 11,970 5,681 (13,565)

Total return/(loss) 16,946 11,509 (5,818)

Weighted average number of shares in issue 71,417,172 72,767,969 72,515,547 Revenue return per share 6.97p 8.01p 10.68pCapital return/(loss) per share 16.76p 7.81p (18.71)p

Total return/(loss) per share 23.73p 15.82p (8.03)p


Income share 2019 2018 2019

Return per share is based on the following:Revenue return 4,990 5,096 6,898 Capital return/(loss) 7,271 4,145 (4,786)

Total return 12,261 9,241 2,112

Weighted average number of shares in issue 100,833,912 101,745,485 101,651,495 Revenue return per share 4.95p 5.01p 6.79p Capital return/(loss) per share 7.21p 4.07p (4.71)p

Total return per share 12.16p 9.08p 2.08p



4. Dividend


2019 2018 2019£’000 £’000 £’000

Growth ShareDividends paidUnclaimed dividends refunded to the Company (17) (1) (1)2019 second interim dividend of 4.00p paid to shareholders in April (2018: 2.00p) 2,879 1,544 1,544

2019 first interim dividend of 4.85p paid to shareholders in October — — 3,520

Total growth share dividends paid in the period 2,862 1,543 5,063

Dividends declared2019 second interim dividend of 4.00p payable to shareholders in April — — 2,879

2020 first interim dividend of 4.85p payable to shareholders in October (2019: 4.85p) 3,411 3,520 —

Total growth share dividends declared 3,411 3,520 2,879

Income ShareDividends paid2019 fourth interim dividend of 2.50p paid to shareholders in April (2018: 2.50p) 2,538 2,344 2,344

2020 first interim dividend of 1.40p paid to shareholders in July (2019: 1.25p) 1,413 1,272 1,272

2019 second interim dividend of 1.25p paid to shareholders in October — — 1,271

2019 third interim dividend of 1.25p paid to shareholders in January — — 1,270

Total income share dividends paid in the period 3,951 3,616 6,157

Dividends declared2019 fourth interim dividend of 2.50p payable to shareholders in April — — 2,538

2020 second interim dividend of 1.40p payable to shareholders in October (2019: 1.25p) 1,409 1,272 —

Total income share dividends declared 1,409 1,272 2,538

The combined total of growth and income dividends paid and declared is identified in Statement of Changes in Equity on page 27.



5. Net asset value per share


2019 2018 2019

Growth ShareNet assets (£’000) 241,476 255,676 234,291Number of shares in issue 69,941,803 72,554,097 72,306,030

Net asset value per share 345.3p 352.4p 324.0p

Income ShareNet assets (£’000) 181,335 184,395 173,539 Number of shares in issue 100,575,498 101,645,224 100,914,066

Net asset value per share 180.3p 181.4p 172.0p

6. Reconciliation of net return/(loss) before finance costs and taxation to net cash outflow fromoperations before dividends and interest


2019 2018 2019£’000 £’000 £’000

Net return/(loss) before finance costs and taxation 31,154 22,550 (1,543) (Less capital return)/add capital loss before finance costs and taxation (19,666) (10,273) 17,501

Scrip dividends included in income — (97) (179)Decrease/(increase) in accrued income and other debtors 1,176 493 (535)Decrease in accrued expenses (31) (31) (11)Management fee charged to capital (1,129) (1,171) (2,265)Overseas withholding tax (1,301) (2,063) (2,883)Dividends received (12,198) (11,635) (14,277)Interest received on cash and cash equivalents (93) — (4)Realised gains/(losses) on foreign currency transactions 182 315 (4)Realised gains/(losses) on liquidity fund 522 341 (326)

Net cash outflow from operations before dividends and interest (1,384) (1,571) (4,526)



7. Fair valuation of investments

The fair value hierarchy analysis for Financial Instruments held at fair value at the period end is as follows:


2019 2018 2019Assets Liabilities Assets Liabilities Assets Liabilities£’000 £’000 £’000 £’000 £’000 £’000

Level 11 454,071 (301) 471,308 (201) 430,366 (261)Level 22 101 (128) 289 (804) 397 (364)

Total 454,172 (429) 471,597 (1,005) 430,763 (625)

1 Includes future currency contracts.2 Includes forward foreign currency contracts and spot contracts.

Interim Management Report


I N T E R I M M A N A G E M E N T R E P O R T

The Company is required to make the following disclosures in its half year report:

Principal Risks and UncertaintiesThe Principal Risks and uncertainties faced by the Company fall into the following broad categories: investment and strategy;accounting, legal and regulatory; corporate governance and shareholder relations; operational; and financial. Information on each ofthese areas is given in the Business Review within the Annual Report and Accounts for the year ended 31st March 2019.

Related Parties TransactionsDuring the first six months of the current financial year, no transactions with related parties have taken place which have materiallyaffected the financial position or the performance of the Company.

Going ConcernThe Directors believe, having considered the Company’s investment objectives, risk management policies, capital management policiesand procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriatefinancial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and,more specifically, that there are no material uncertainties relating to the Company that would prevent its ability to continue in suchoperation existence for at least twelve months from the date of the approval of this half yearly financial report. For these reasons, theyconsider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.

Directors’ ResponsibilitiesThe Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance withFRS 104 ‘Interim Financial Reporting’ and gives a true and fair view of the state of affairs of the Company and of the assets,liabilities, financial position and net return of the Company, as at 30th September 2019, as required by the UK Listing AuthorityDisclosure and Transparency Rules 4.2.4R; and

(ii) the interim management report includes a fair review of the information required by 4.2.7R and 4.2.8R of the UK ListingAuthority Disclosure and Transparency Rules.

In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed andexplained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continuein business;

and the Directors confirm that they have done so.

For and on behalf of the BoardJosephine DixonChairman 29th November 2019

Shareholder Information

C A P I T A L S T R U C T U R E A N D C O N V E R S I O N b E T w E E N S H A R E C L A S S E S


The Company has two share classes, each with distinct investment policies, objectives and underlying asset pools. Each share class islisted separately and traded on the London Stock Exchange. This capital structure means that shareholders may benefit from greaterinvestment flexibility in a tax-efficient manner.

Capital Structure • Growth Shares

Capital growth from Continental European investments, by consistent out-performance of the benchmark and a rising share priceover the longer term by taking carefully controlled risks through an investment method that is clearly communicated toshareholders.

• Income Shares To provide a growing income together with the potential for long-term capital growth from a diversified portfolio of investmentsin pan-european stockmarkets.

Conversion Opportunities Shareholders in either of the two share classes are able to convert some or all of their shares into shares of the other class withoutsuch conversion being treated, under current law, as a disposal for UK capital gains tax purposes.

The conversion mechanism allows shareholders to alter their investment profile to match their changing investment needs ina tax-efficient manner.

Conversion is annual on 15th March (if such a date is not a business day, then the conversion date will move to the next business day).

The Company, or its Manager, makes no administrative charge for any of the above conversions.

Conversion between the share classes Request to convert shares can be made via the selected third party investment platform provider you hold the shares with.

Your conversion instructions must be received by your chosen third party platform provider in line with their specific timetable.

If you hold your shares in certificated form, CREST details will be available on the Company’s website towards the end of January.

The number of shares that will arise upon conversion will be determined on the basis of the relative net asset values of each shareclass.

Details concerning conversion instruction forms can be found on the Company’s website: www.jpmeuropean.co.uk

GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES (APMs)

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Return to Shareholders (APM)

Total return to the shareholders, on a last traded price to last traded price basis, assuming that all dividends received were reinvested,without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend.

Growth Shares Period endedTotal return calculation Page 30th September 2019

Opening share price (p) 4 265.0 (a)

Closing share price (p) 4 282.0 (b)

Total dividend adjustment factor1 1.016782 (c)

Adjusted closing share price (d = b x c) 286.7 (d)

Total return to shareholders (e = (d / a) – 1) 8.2% (e)

Income Shares Period endedTotal return calculation Page 30th September 2019

Opening share price (p) 6 144.0 (a)

Closing share price (p) 6 149.0 (b)


Adjusted closing share price (d = b x c) 151.8 (d)

Total return to shareholders (e = (d / a) – 1) 5.4% (e)

1 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the last tradedprice quoted at the ex-dividend date.

Return on Net Assets (APM)

Total return on net asset value (‘NAV’) per share, on a bid value to bid value basis, assuming that all dividends paid out by the Companywere reinvested, without transaction costs, into the shares of the Company at the NAV per share at the time the shares were quotedex-dividend.

Growth Shares Period endedTotal return calculation Page 30th September 2019

Opening NAV per share (p) 4 324.00

(–) the 2nd interim dividend declared but not paid pre year-end date (4.00)

Adjusted opening NAV per share (p) 320.00 (a)

Closing NAV per share (p) 4 345.30

(–) the 1st interim dividend declared but not paid pre year-end date (4.85)

Adjusted closing NAV per share (p) 340.50 (b)


Adjusted closing NAV per share (d = b x c) 4 345.30 (d)

Total return on net assets (e = (d / a) – 1) 7.9% (e)

2 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the NAV at theex-dividend date.



Income Shares Period endedTotal return calculation Page 30th September 2019

Opening NAV per share (p) 172.0

(–) the 4th interim dividend declared but not paid pre year-end date (2.5)

Adjusted opening NAV per share (p) 169.5 (a)

Closing NAV per share (p) 180.3

(–) the 2nd interim dividend declared but not paid pre year-end date (1.4)

Adjusted closing NAV per share (p) 178.9 (b)


Adjusted closing NAV per share (d = b x c) 181.8 (d)

Total return on net assets (e = (d / a) –1) 7.2% (e)

In accordance with industry practice, dividends payable which have been declared but which are unpaid at the balance sheet date arededucted from the NAV per share when calculating the total return on net assets.2 The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the NAV at theex-dividend date.

Net Assets with Debt at Fair Value (APM)

The Company’s debt (private placement) is valued in the Statement of Financial Position (on page 28) at amortised cost, which ismaterially equivalent to the repayment value of the debt on the assumption that it is held to maturity. This is often referred to as ‘Debtat Par Value’.

The current replacement or market value of the debt, which assumes it is repaid and renegotiated under current market conditions, isoften referred to as the ‘Debt at Fair Value’.

The difference between fair and par values of the debt is subtracted from the NAV to derive the NAV with debt at fair value. The fairvalue of the Euro 50.0 million Private Placement issued by the Company has been calculated using discounted cash flow techniques,using the yield from similar dated German government bond plus a margin based on the five year average for the AA barclays SterlingCorporate bond spread.

As at 30th September 2019, €29.15 million of the €50.0 million was allocated to the Growth pool with the remaining €20.85 millionallocated to the Income pool.

The NAV with debt at fair value at 30th September 2019 was £231,227,600 (330.6p per share) for the Growth share and £181,337,600(173.9p per share) for the Income share.

Benchmark return

Total return on the benchmark, on a closing-market value to closing-market value basis, assuming that all dividends received werereinvested, without transaction costs, in the shares of the underlying companies at the time the shares were quoted ex-dividend(see pages 3 and 5).

The benchmark is a recognised index of stocks which should not be taken as wholly representative of the Company’s investmentuniverse. The Company’s investment strategy does not follow or ‘track’ this index and consequently, there may be some divergencebetween the Company’s performance and that of the benchmark.

Gearing/(net cash) (APM)

Gearing represents the excess amount above shareholders’ funds of total investments, expressed as a percentage of the shareholders’funds. If the amount calculated is negative, this is shown as a ‘net cash’ position.

S H A R E H O L D E R I N F O R M A T I O N | 4 1


Gearing calculation

Growth Shares 30th September 2019 31st March 2019 Page £’000 £’000

Investments held at fair value through profit or loss 28 263,026 252,446 (a)

Net assets 28 241,476 234,291 (b)

Gearing/(Net cash) (c = (a / b) – 1) 8.9% 7.7% (c)

Income Shares 30th September 2019 31st March 2019 Page £’000 £’000

Investments held at fair value through profit or loss 28 191,018 177,920 (a)

Net assets 28 181,335 173,539 (b)

Gearing/(Net cash) (c = (a / b) – 1) 5.3% 2.5% (c)

Ongoing charges (APM)

The ongoing charges represent the Company’s management fee and all other operating expenses excluding finance costs payable andexcluding/including performance fee payable, expressed as a percentage of the average of the daily net assets during the year and iscalculated in accordance with guidance issued by the Association of Investment Companies.

The figure as at 30th September 2019 is an estimated annualised figure based on the actual figures for the six months ended30th September 2019.

Ongoing charges calculation

Growth Shares 30th September 2019 31st March 2019 Page £’000 £’000

Management Fee 17 1,940 1,946

Other administrative expenses 17 556 478

Total management fee and other administrative expenses 2,496 2,424 (a)

Average daily net assets 240,719 240,648 (b)

Ongoing charges (c = a / b) 1.04% 1.01% (c)

Income Shares 30th September 2019 31st March 2019 Page £’000 £’000

Management Fee 23 1,500 1,505

Other administrative expenses 23 330 362

Total management fee and other administrative expenses 1,830 1,867 (a)

Average daily net assets 177,452 176,789 (b)

Ongoing charges (c = a / b) 1.03% 1.06% (c)

Share Price Discount/Premium to Net Asset Value (‘NAV’) per Share (APM)

If the share price of an investment trust is lower than the NAV per share, the shares are said to be trading at a discount. The discount isshown as a percentage of the NAV per share. The opposite of a discount is a premium. It is more common for an investment trust’sshares to trade at a discount than at a premium.


w H E R E T O b U Y J . P . M O R G A N I N V E S T M E N T T R U S T S

Avoid investment fraud1 Reject cold calls

If you’ve received unsolicited contact about an investment opportunity, chances are it’s a high risk investment or a scam. You should treat the call with extreme caution. The safest thing to do is to hang up.

2 Check the FCA Warning List The FCA Warning List is a list of �rms and individuals we know are operating without our authorisation.

3 Get impartial advice Think about getting impartial �nancial advice before you hand over any money. Seek advice from someone unconnected to the �rm that has approached you.

Report a ScamIf you suspect that you have been approached by fraudsters please tell the FCA using the reporting form at www.fca.org.uk/consumers/report-scam-unauthorised-�rm. You can also call the FCA Consumer Helpline on 0800 111 6768

If you have lost money to investment fraud, you should report it to Action Fraud on 0300 123 2040 or online at www.actionfraud.police.uk

Find out more at www.fca.org.uk/scamsmart

Investment scams are designed to look like genuine investmentsSpot the warning signs

Have you been:

• contacted out of the blue• promised tempting returns

and told the investment is safe• called repeatedly, or• told the offer is only available

for a limited time?

If so, you might have been contacted by fraudsters. Remember: if it sounds too good to be true,

it probably is!

Be ScamSmart

J.P. Morgan investment trusts are eligible investments withina stocks & shares individual savings account (ISA) and Junior ISA.For the 2019/20 tax year, from 6th April 2019 and ending5th April 2020, the annual ISA allowance is £20,000 and theJunior ISA annual allowance is £4,368.

You can invest in J.P. Morgan investment trusts through thefollowing;

1. Via a third party provider

Third party providers include:

Please note this list is not exhaustive and the availability of theCompany’s shares may vary depending on the provider. Thesewebsites are third party sites and the Company does not endorseor recommend any. Please observe each site’s privacy and cookiepolicies as well as their platform charges structure.

2. Through a professional adviser

Professional advisers are usually able to access the products of allthe companies in the market and can help you find an investmentthat suits your individual circumstances. An adviser will let youknow the fee for their service before you go ahead. You can findan adviser at unbiased.co.uk

You may also buy J.P. Morgan investment trusts throughstockbrokers, wealth managers and banks.

To familiarise yourself with the Financial Conduct Authority (FCA)adviser charging and commission rules, visit fca.org.uk

Information for J.P. Morgan Investment Account,Stock & Shares ISA account holders

From 28th September 2019 J.P. Morgan Asset Managementceased offering investment accounts and stocks & shares ISAsavings products. Investors are able to remain invested inJ.P. Morgan managed investment trusts by transferring to anotherservice provider. For full details of all the options available toinvestors, please refer to correspondence sent by J.P. Morgan on8th April 2019 or contact your financial adviser.

The board continues to encourage all of its shareholders toexercise their rights and notes that many specialist platforms,to include the default options offered by JPMorgan, provideshareholders with the ability to continue to receive Companydocumentation, to vote their shares and to attend generalmeetings, at no cost. Please refer to your investment platformfor more details, or visit the AIC’s website atwww.theaic.co.uk/aic/shareholder-voting-consumer-platforms forinformation on which platforms support these services and howto utilise them.

AJ bellbarclays Smart InvestorCharles Stanley DirectFundsNetwork

Hargreaves LansdownInteractive InvestorSelftradeThe Share Centre

I N F O R M AT I O N A B O U T T H E C O M PA N Y

S H A R E H O L D E R I N F O R M AT I O N | 4 3

HistoryJPMorgan European Investment Trust plc was formed in 1929 as The London andHolyrood Trust Limited and was a general investment trust until 1982 when thename was changed to The Fleming Universal Investment Trust. Under this namethe portfolio became more internationally invested until November 1988, when theBoard decided to concentrate on Continental European investments. In 1992shareholders approved a formal adoption of this specialisation. The Companyadopted its current structure and name in August 2006.

DirectorsJosephine Dixon (Chairman)Rita DhutStephen GoldmanJutta af RosenborgStephen Russell

Company NumbersCompany registration number: 237958 LEI: 549300D8SPJFHBDGXS57London Stock Exchange Sedol numbers: Growth: B18JK16 Income: B17XWW4 ISIN numbers: Growth: GB00B18JK166 Income: GB00B17XWW44 Bloomberg Codes: Growth: JETG LN Income: JETI LN

Market InformationThe Company’s net asset value is published daily, via The London Stock Exchange.The Company’s shares are listed on the London Stock Exchange. The market pricesare shown daily in the Financial Times, The Times, the Daily Telegraph, TheScotsman and on the Company website at www.jpmeuropean.co.uk, where theshare prices are updated every fifteen minutes during trading hours.

Websitewww.jpmeuropean.co.uk

Share TransactionsThe Company’s shares may be dealt in directly through a stockbroker orprofessional adviser acting on an investor’s behalf.

Manager and Company SecretaryJPMorgan Funds Limited

Company’s Registered Office60 Victoria EmbankmentLondon EC4Y 0JPTelephone number: 020 7742 4000

Please contact Paul Winship for company secretarial and administrative matters.

DepositaryThe Bank of New York Mellon (International) Limited1 Canada SquareLondon E14 5AL

The Depositary has appointed JPMorgan Chase Bank, N.A. as the Company’scustodian.

RegistrarsEquiniti LimitedReference 1080Aspect HouseSpencer RoadLancingWest Sussex BN99 6DATelephone number: 0371 384 2319

Lines open 8.30 a.m. to 5.30 p.m. Monday to Friday. Calls to the helpline will costno more than a national rate call to a 01 or 02 number. Callers from overseasshould dial +44 121 415 0225.

Notifications of changes of address and enquiries regarding share certificatesor dividend cheques should be made in writing to the Registrar quotingreference 1080. Registered shareholders can obtain further details on theirholdings on the internet by visiting www.shareview.co.uk.

Independent AuditorErnst & Young LLP Chartered Accountants and Statutory Auditor1 More London Place London SE1 2AF

BrokersWinterflood Securities LimitedThe Atrium Building Cannon Bridge25 Dowgate HillLondon EC4R 2GATelephone 020 7621 0004

FINANCIAL CALENDAR

Financial year end 31st March

Final results announced June

Half year end 30th September

Half year results announced November

Dividends payable – Growth April and October

Dividends payable – Income April, July, October and January

Annual General Meeting July

A member of the AIC

GB I110 | 11/19

100%

CONTACT

60 Victoria EmbankmentLondon EC4Y 0JPTel +44 (0) 20 7742 4000Website www.jpmeuropean.co.uk

jpmorgan european investment trust plc · 2019-12-02 · contents contents half year performance...

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